Redundancy practice ‘hits morale of remaining staff’

HOW companies deal with making workers redundant can have a serious impact on the attitude and morale of those who hold on to their job, a seminar organised by Shannon Chamber of Commerce, heard.

Miriam Magner Flynn, managing director of Limerick-based Career Decisions, told company bosses: “If a redundancy is handled badly, with poor communication and poor career support for departing or surviving employees, then companies can expect departing employees to be extremely angry and hostile towards the company.

“The morale of remaining employees will significantly drop, with a corresponding drop in productivity, and the organisation’s brand and reputation may be seriously damaged.”

She advises companies on how to handle redundancy situations.

Ms Magner Flynn said: “Redundancy causes stress and upheaval at many levels, not just internally with employees but externally, with suppliers and the wider business community – local, national and international.

“All the signals emanating from such situations must be planned for and communicated in an open and honest way.”

While redundant employees, she said, should be supported in their preparations for a world outside their current employment, the distrust, worry and uncertainty for the future that will manifest itself in the minds of those left behind, must also be managed.

Ms Magner Flynn said: “Productivity may be impacted by the loss of key skills, so the need to retrain, regenerate and restore belief in the company as a trusted employer has to be carefully managed.”

Similar sentiments were expressed be another speaker, Derek McKay of Adare Human Resource Management who specialise in employment law and human resource management.

He said: “While we are now seeing a lot more redundancies, lay offs and short-time working, changes in working conditions are also prevalent.

“The change trigger is often beyond the control of the people who experience it, so the first step in any change management programme must be to manage the people experiencing the change

“Employment law practitioners expect to see a significant increase in the number of unfair dismissal claims in the next few years due to unfair selection for redundancy, breach of contract, and payment of wages, so it’s in everyone’s best interest that such litigation is avoided through carefully constructing a change management plan.

“That’s where a lot of companies fail.

“Managers must ensure that their change programmes comply with employment law.”